KISHORE SEWANI,BHOPAL vs. ITO-1(4), BHOPAL

The captioned two appeals are filed by assessee for Assessment-Year [“AY”] 2013-14. The details of appeals are as under:

The background facts leading to these appeals are such that the assessee-individual filed return of AY 2013-14 declaring a total income of Rs. 4,30,446/- by way of share in profit and remuneration from partnership firms, rental income from house property and income from other sources. In the return so filed, the assessee also declared long-term capital gain computed at Rs. Nil from sale of an agricultural land situated at Gondermau, Bhopal for Rs. 1.25 crore after claiming deduction of cost of acquisition, transfer expenses and exemption u/s 54F on the basis of new investment in a property. The case of assessee was taken up for scrutiny assessment and the AO issued statutory notices u/s 143(2)/142(1) which were complied by assessee. Ultimately, the AO passed assessment-order determining total income at Rs. 1,08,12,716/- after making these additions, namely (i) short-term capital gain of Rs. 1,02,34,840/- from sale of impugned agricultural land, (ii) low household expenses of Rs. 80,000/-, and (iii) Unexplained expenses of Rs. 67,430/- registration and stamp duty of new property purchased. Aggrieved, the assessee carried matter in first- appeal but the CIT(A) passed ex-parte order due to non-prosecution by Page 2 of 8 assessee and upheld AO’s order. Still aggrieved, the assessee has come in next appeal before us.

Since these appeals are inter-related, they were heard together and are being disposed of by this common order for the sake of convenience, brevity and clarity. We firstly start with Quantum-Appeal and thereafter take up Penalty-Appeal.

The Registry has informed that this appeal is delayed by 458 days and therefore time-barred. Ld. AR for assessee submits that the appeal was filed by assessee on 28.06.2024 against impugned order dated 27.01.2023 passed by CIT(A). He submits that the assessee has filed a condonation- application supported by affidavit of assessee and supporting attachments running over 5 pages. The application filed by assessee is scanned and re- produced below which incorporates the reason of delay in meticulous terms.

The contents of above application, which are self-explanatory, were deliberated with reference to the supporting documents and found authentic. Ld. AR very humbly submitted that there is no lethargy, negligence, mala fide intention or ulterior motive of assessee in making delay and the assessee does not stand to derive any benefit because of delay. He further submitted that the sole reason of delay is as explained in the condonation-application. He submitted that there is a “sufficient cause” for delay and hence the delay should be condoned. In the situation, Ld. DR for revenue left the matter for the wisdom of bench without raising objection against condonation of delay. We have considered the explanation advanced by assessee and in absence of any contrary fact or material on record, the assessee is found to have a “sufficient cause” for delay in filing present appeal. We find that section 253(5) of the Act empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a “sufficient cause” for not presenting appeal within prescribed time. It is also a settled position by Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst.

On merit of case, Ld. AR submits that the assessee is ready and willing to make a proper representation before CIT(A) if an opportunity is given and prays that the present matter should be remanded to the file of CIT(A) for a proper adjudication of the grounds/issues raised by assessee in first-appeal.

Ld. DR for revenue agrees with the prayer of Ld. AR but makes a request to direct the assessee to represent his case before CIT(A) and do not seek unnecessary adjournments.

Considering above submissions of parties and having regard to the principle of natural justice, we remand this matter back to the file of CIT(A) for adjudication afresh. The CIT(A) shall give necessary opportunity of hearing to assessee and pass an appropriate order uninfluenced by his earlier order. The assessee is also directed to remain vigilant and ensure participation in the hearings as may be fixed by CIT(A) and do not seek unnecessary adjournments failing which the CIT(A) shall be at liberty to pass appropriate order in accordance with law. Ordered accordingly.

This appeal involves penalty u/s 271(1)(c) which is dependent on outcome of Quantum-Appeal. Since we have already remanded Quantum- Appeal to CIT(A), this matter is also remanded to CIT(A) for adjudication afresh after considering outcome of Quantum-Appeal and also considering submissions of assessee.

Resultantly, both of these appeals are allowed for statistical purposes.